The Real Reason You Are Broke

I keep having the same conversation with at least 20 different people over the last few weeks about how they don’t have enough money. Then one day I talked to three people I know who make six figures. I was wondering, what’s going on.

It’s one thing to be in a world of debt and it’s another thing to be in a world of debt and have nothing tangible to show for it. That’s what’s been going on.

Back in the day, I was actually like you. Sixteen or twenty years ago, I did not know how to handle money. I knew how to make money. I knew how to hustle.

You know how people come to you in your life. What’s that saying? When the student is ready the teacher will show up. It’s funny because I was thinking this weekend how often I come across people who don’t make a lot of money, but they are excellent managers of the money they make. That is key.

The first person who taught me how to handle money was someone I worked with. I can’t even remember her name. She comes to work one day and she has this brand-new Celica. It was new for her, but it was a used car. She said it was only $8K. She said it was a good deal and she paid cash for it.

I knew what she made per hour. I knew I almost made twice what she made. I asked her where she got the money. She said she saved it. I wondered how the hell she did that.

We were on break together talking. She lived at home with her parents. She took full advantage of the opportunity. She paid her parents $250 a month. Her dad taught her to save. His house was paid for and the guy dropped out of high school. He told her to save half of what she made.

At the time, she was maybe 32 or 34. She broke it down for me. She said I get paid twice a month hand sometimes three times a month. She said, “This is what I do with my first check. I buy groceries, pay my parents and put some money in my pocket.” That second check went straight into savings. I asked her how long she had been doing that. She said for years. She said she had $40K saved.

There was something else I remember about her. She had mad, mad attitude. She was that type of employee that would tell her boss how she felt. When I asked her about that, she said, “I’ve got attitude money.” I asked her what attitude money was. She said, “I’ve got a little stash. If they fire me, I’m good.”

Another lesson about money came to me via an elderly couple I met when I worked at Northside Hospital. Sometimes when you meet patients, you get that vibe and you become friends. This guy was a school teacher and his wife was also a school teacher. When they got married, they saved first and spent later. They lived with his parents the first year they were married and saved her salary to put down on a house. They continued to live on one salary and paid that house off very quickly.

Once again, these are not brilliant financial strategists. These are hardworking people that applied common sense. That’s the gist of it. You are going to have to employ common sense with your money.

Most people’s problem isn’t a lack of money. It’s a lack of discipline. This is the challenge for this blog. I want you to take $5 and put it in a can or savings account every week. That’s not a lot of money. Do that every week. I know that sounds silly but it will change you.

I did this myself. I did it with $5. Around the fourth month, I realized I had about $65. I knew I could do better, so then I increased it to $10. Then I increased it to $25. Over a two-year period, I got it up to $100 a week.

Understand that there was a survey that found that over 50% of people in the USA could not come up with $2K in a thirty-day period if they needed to. That’s problematic. That’s a big ass problem.

It’s not because these people are stupid. We have been indoctrinated as a culture to fulfill our wants now and pay for it later. The problem is the interest you pay to do that, which reduces the buying power of your dollar.

You have to develop financial discipline. You need to train your brain that money that crosses your hand does not have to go out somewhere. You need to sit back and evaluate what you’re going to do with the money before you spend it.

I am going to tell you a few things I have done to free up cash. One day a guy hit my BMW and wrecked it. I got some money for it. I decided not to replace that car because of some things going on in my life at the time. I decided to sit on the money and parked it in the bank. I went on Craigslist and got a “91 Honda Accord with 200K miles on it for $800. That thing lasted me a year. I sold it for $750.

I’ve had roommates. I was making a six-figure income and I had a roommate. That brings me to another lesson I learned from some people I barely knew. I used to work with this Indian guy. He was an IT guy. This guy dropped by the office and he introduced him as his roommate. I asked him, “How many roommates do you have?” He said, “Five.” He was in a five-bedroom house and rented out the house to other Indian guys he barely knew. He said when they paid their rent, it put him ahead $680 a month.

It blew my mind. He made $85K a year. He said when he got married, then he would buy his own house. He said he did not need his own house now. I saw his wife when she came over. He got lucky on that arranged marriage, because she was hot.

These are some of the lessons I learned over the years. If you have a high income and you step down in your lifestyle, you free up tons of cash. I’m amazed at the number of people who make $80K to $150K who are broke. People spend money on shoes, clothes and lunch. They are fucking themselves.

Your problem is not with how much money you make. It is with what you do with the money that crosses your hand. Learn to save.

If you have just $5,000 in cash, it will handle 85% to 90% of the emergencies that happen in life. Then you wouldn’t have to rob Peter to pay Paul. If you have any business ambitions, you have to learn how to save. Learn to live without stuff. Get away from this immediate gratification bullshit. It’s killing you.

What’s gotten me ahead in life is having more discipline or hustle than the average guy. You have to write your goals down on a sheet of paper or type them up and print them. That will engrave that goal in your mind.

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